A deficit in the capacity to process auditory information has been proposed as one of the core abnormalities in schizophrenia (Sz). Despite the importance of the subject, we know little about the mechanisms underlying normal or disordered auditory processing, or about the clinical significance of auditory deficits. Research focuses increasingly on the time-frequency brain activity associated with auditory processes, as it's hypothesized that single-trial amplitude and phase measures more closely reflect neural processes. As detailed throughout this K08 proposal, my recent superior temporal gyrus (STG) timefrequency findings build upon and greatly extend findings in this area of research, and present results indicate several clear lines of research where advances in the understanding and treatment of Sz are likely. For the K08 study, using novel tasks developed for this K08 project, functional measures (electroencephalography and magnetoencephalography) of auditory activity throughout the brain will be obtained with 50 controls and 50 patients. There are 3 substantive research goals: (1) determine the nature of auditory abnormalities in Sz by examining multiple nodes in the auditory network and by multiply assessing each processes (encoding vs. gating, amplitude vs. phase-locking), (2) determine whether the abnormal auditory processes can be normalized in patients with Sz by varying attention aI/task-set requirements, and (3) determine the clinical significance of the observed abnormalities. An encoding phase-locking deficit is hypothesized, and it is hypothesized that this abnormality is associated with cognitive problems and increased negative symptoms. K08 training complements K08 research. Primary K08 training goals include: (1) study of several novel distributed source localization methods and advanced time-frequency signal processing techniques in order to examine auditory activity throughout the brain, and (2) classroom work on relevant cellular and molecular biology of the nervous system and the neural processes that underlie emergent oscillatory activity. These methods and data will form the foundation of a R01 that seeks to normalize auditory dysfunction in Sz.